Whenever we’re talking about home worth vs market value, a lot of clients don’t really understand that there’s a difference. That’s understandable. Most people haven’t sold or purchased a bunch of homes, and these are concepts you probably don’t use in your everyday life.
However, it does have a big impact on your experience when you’re selling your home.
Today, we’re going to break it down for you.
What is Home Worth?
Home worth is what the owner thinks it is. There are some clear problems with that.
The homeowner is very likely to exaggerate the value in a positive way. It’s usually affected by various tangible factors such as condition, local home values, size, and other things that are rooted in reality, but you’re pretty likely to want the maximum amount you can reasonably justify. Opinion also becomes a factor, and that’s always going to have an impact on accuracy.
You can also do this in reverse and undersell your home’s value considerably. It happens all the time, and it’s another reason that hiring a professional is such an important decision.
This doesn’t mean that your sense of home worth isn’t a valuable number to consider. It just needs to be aligned with reality.
What is Market Value?
Market value is a constantly fluctuating number, and it’s meant to show what the home is likely to sell for if you sell it right now. Remember, you can ask for whatever you want, but the market won’t respond if it’s too high.
Market value is based on data. It’s still a guess, and the reality is that your home’s selling price will likely sell somewhere within a range depending on the buyers you find and specific details of the home, but it’s a highly educated guess that should be close to the proper value of the home.
Market value takes into account what local homes with similar features, space, and designs are selling for, how in-demand the housing market is, and many other data points that complicate it dramatically.
The important part to know is that this is the value homebuyers are likely to be willing to spend. That’s regardless of any high-value features you’ve researched, how much you paid for the home, etc.
As you can see, there are a lot of moving parts to juggle when selling a home, so it really helps to go in prepared. One of the best ways to do that is to have a few key questions ready for your agent. Ask about things like pricing strategy, the timing of your listing, and how your home compares to similar ones in the area.
What’s More Important: House Worth or Market Value?
Neither of these factors is technically more important than the other. Optimally, you want the two of them to align pretty closely.
If you add up all the different value points your home has, what the average cost per foot in your area is, and other price features, you want the market value to match that or at least get close to it.
Otherwise, listing your home might be a bad idea. You might genuinely have a high-value home that’s likely to sell for tens of thousands of dollars less because of market problems.
Determine Your Home’s Value and Strategize to Sell with Sunny G
Understanding the difference between home worth vs market value is key to pricing your home realistically and setting yourself up for a successful sale.
At Sunny Gawri Real Estate, you’ll get honest advice and access to a free home evaluation tool that helps you understand where your property stands in today’s market.
Contact us today to see how we can help you get the most out of your home sale!
